The regulatory framework for financial reporting and auditing in the United Kingdom: the present position and impending changes (original) (raw)

Watchdogs or straw dogs? A critical appraisal of the UK regulatory framework with respect to (non-)compliance with financial reporting standard no. 1

International Journal of Auditing, 1997

The objective of this paper is to appraise the UK regulatory framework by focusing on the statutory ®nancial audit and its role in testing companies' (non-)compliance with a new ®nancial reporting standard (FRS1). The analysis is based on a large-scale survey of the cash¯ow statements required by FRS1 in company accounts along with the audit reports of each company. The survey reveals that signi®cant variations in the standard format for cash ow statements were allowed without any audit comment. The study concludes by raising causes for concern about the UK regulatory framework, and arguing that the objective of FRS1 was not fully achieved because of the wide variations in the standard format produced by companies. It suggests that a solution to the concerns raised is to increase the use of comments in audit reports by restoring the`emphasis of matter' principle.

Audit Quality and the Market for Audits: An Analysis of Recent UK Regulatory Policies

[extract] This article sets out UK regulatory developments concerning statutory audits of companies and investigates their coherence and likely efficacy given the theoretical, empirical and practical problems of defining and assessing audit quality. Although the regulatory details in this article are drawn from the UK, some of its theoretical arguments are more generally applicable and some of the empirical literature relates to other jurisdictions.

Review of practical implementation issues relating to International Financial Reporting Standards: Case study of the United Kingdom of Great Britain and Northern Ireland

International Accounting and Reporting Issues, 2011

This case study presents the context, application and enforcement of international financial reporting standards (IFRS) in Switzerland. It begins with an introduction to the Swiss legal framework by presenting the requirements for accounting, reporting, and auditing. It then examines the application and enforcement of IFRS in Switzerland, particularly for listed companies. It concludes with a summary and an overview of expected amendments to the legal framework. The study notes that the regulatory framework for financial reporting in Switzerland is oriented towards the protection of creditors. International exposure and a need to raise external capital motivated Swiss entities to implement International Accounting Standards (IAS) on a voluntary basis and provide consolidated financial statements. The study shows that, between 2001 and 2007, the number of number of entities listed on the Swiss Exchange that prepare their annual reports on the basis of IFRS grew from 155 to 191. In 2007, out of a total of 262 companies listed on the Swiss Exchange, about 73 per cent prepared their financial statements in accordance with IFRS. For 2007, the key areas of focus for enforcement of IFRS for the Swiss Exchange relate to: financial instruments disclosure; accounting policies; income taxes; related party disclosures; and intangible assets from business combinations.

Antecedents and Expected Outcomes of the New Accounting Regulation in the European Union

Research in Accounting Regulation, 2005

Considering the growing importance of capital markets for corporate financing and operating in the common currency environment, the European Commission developed an ambitious action plan integrating the financial services markets within the European Union (EU). In the area of financial reporting, the action plan proposed an unprecedented approach that all EU-listed companies report under the same accounting framework. Consequently, a new Regulation was approved requiring EU-listed companies to prepare consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) for years beginning on or after January 1, 2005. The objective of this paper is to look back at the accounting harmonization process in the EU leading to this Regulation. The reasons behind the decision to make IFRS compulsory are explored in the broader context of the EU market reforms. The paper also presents a forward look into the implementation issues and implications of the new accounting strategy for the EU and beyond.

ACCOUNTING REGULATION: AN ALTERNATIVE PERSPECTIVE

Journal of Business Finance & Accounting, 1983

Nevertheless, this is the task which the authors have set out to achieve in this and a series of future papers. In doing so, it will not be possible either to survey or to assess the whole of existing accounting theory; neither would it be necessary. It has, rather, been attempted through focussing on specific fundamental issues to expose the problems in accounting at present, and thereby explore the potential for change.

The future of financial reporting in Europe: its role in corporate governance

The International Journal of Accounting, 2000

At a recent congress of the European Accounting Association, the President of the Belgian Institute of Registered Auditors, Paul Behets, delivered a plenary speech with the title: Are Financial Statements an Obsolete Product? Behets' answer was``no,'' that financial statements are an essential component of the financial reporting system that is necessary for the proper functioning of capital markets. In this article, we reach a similar conclusion, but for somewhat different reasons. A central argument of this article is that an effective system of corporate governance requires an effective financial reporting system, and that an effective financial reporting system requires a well-ordered system of financial accounting. Behet's speech provides evidence that financial reporting, and the role of traditional audited financial statements within financial reporting, are undergoing a period of change. The future of financial reporting is difficult to predict with any degree of certainty, but it is likely to be a future marked by change. One possible path for change has been suggested by Elliott (1994), who has indicated that the currently accepted model of financial reporting might be replaced by electronic information systems providing financial and other forms of information about companies, not necessarily in the form of audited financial statements, which would be widely available via the Internet. Under this scenario, decision-makers could decide on the types information that are important, and then arrange the information in the ways they see fit. Financial reports in their present form (i.e. audited financial statements) might become obsolete as users decided individually on the types of information that are important to them. If this scenario were to come into being, the question arises at to whether there would be a continuing need for financial reports as presently constituted. It is the argument of this article that even if it is technologically feasible for financial reports to be changed from their present form, there would still be a need for financial reports as an important component of corporate governance. A central argument of this article is that an effective system of corporate governance requires an effective system of financial reporting, and that an effective system of financial

Regulation: Standardising Accounting Practice

2006

This is the practical extension of a previous paper (Gaffikin, 2005) in which the actual attempts to regulate accounting are described and discussed. A most important element of this is the attempts to establish a conceptual framework by the professional bodies. In Australia much of the thrust for regulation has been captured by the law – CLERP. To date there

A Review on Regulations of Financial Reporting

Recent trends in Management and Commerce, 2023

In this essay, we examine and discuss a financial statement preparation technique that helps to prevent creative accounting. The many regulations that have been implemented globally have made it possible for businesses to monitor and document their transactions consistently. As a result, the company's financial reporting continues to be consistent, comparable, and transparent. In many facets of business and society, regulations are essential for maintaining justice and openness. To help businesses prepare financial accounts in accordance with standards, there are a number of frameworks and rules in place for financial accounting.